Get ready for 1099 season in the US
If you are a US based or tax registered business, you must send out a Form 1099-MISC to each non-employee person to whom you’ve paid more than $600 for work during the year. These are usually referred to as contractors. Form 1099-MISC must be delivered to the contractor by January 31, 2014 for tax year 2013 and also sent to the IRS by the end February, if you’re sending paper, or by April 1, 2014, if you opt to e-file. Complete instructions from the IRS for 1099s are found here and here.
Here are our top tips for making 1099’s as easy as possible:
1. Get your contacts in order
Not all contacts will need to be sent 1099-MISC forms. If you have not already done so, create a new contact group (e.g.‘1099 Vendors’) for applicable contacts that should receive a 1099-MISC and add them to this group. You should also ensure contact information, including tax ID number and email, are filled out for each one. Further details are in our 1099 help guide.
Keeping Vendor contact records up to date and grouped correctly during the year will be a huge help when it comes to 1099-MISC filing.
2. Remember the key dates
January 31, 2014 – 1099 forms delivered to contractors
February 28, 2014 – 1099 copies and 1096 due to the IRS, if filing by paper
March 31, 2014 – 1099 copies due to the IRS, if filing electronically. No 1096 needed.
3. Go paper-free
Xero Add-ons like Track1099 make your life a lot easier and allow seamless e-filing and e-delivery of your 1099-MISC forms.
Here is a short video on e-filing 1099’s from Xero with Track1099:
Tax pros can even handle multiple clients using Xero’s integrated 1099 Add On with Track1099.
Xero clients receive a 5% discount when using Track1099 this tax season.
Following these three steps should make 1099s a little more tolerable – and even better – our Xero Training team offers free webinars for a start to finish look at how you can process 1099s in Xero. Sign up here to reserve your seat and until then, let us know if you have any other tips or tricks on making 1099 season as painless as possible with Xero.